Navigating the Patent Thicket: Cross Licenses, Patent Pools, and Standard-Setting

Carl Shapiro

Competition Policy Center, Working Paper Series from Competition Policy Center, Institute for Business and Economic Research, UC Berkeley

Abstract: In several key industries, including semiconductors, biotechnology, computer software, and the Internet, our patent system is creating a patent thicket: an overlapping set of patent rights requiring that those seeking to commercialize new technology obtain licenses from multiple patentees. The patent thicket is especially thorny when combined with the risk of hold-up, namely the danger that new products will inadvertently infringe on patents issued after these products were designed. The need to navigate the patent thicket and hold-up is especially pronounced in industries such as telecommunications and computing in which formal standard-setting is a core part of bringing new technologies to market. Cross-licenses and patent pools are two natural and effective methods used by market participants to cut through the patent thicket, but each involves some transaction costs. Antitrust law and enforcement, with its historical hostility to cooperation among horizontal rivals, can easily add to these transaction costs. Yet a few relatively simple principles, such as the desirability package licensing for complementary patents but not for substitute patents, can go a long way towards insuring that antitrust will help solve the problems caused by the patent thicket and by hold-up rather than exacerbating them.

Keywords: patent; patent system; telecommunications; cross-licenses; semiconductors; biotechnology; computer software (search for similar items in EconPapers)
Date: 2000-05-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (93)

Downloads: (external link)
https://www.escholarship.org/uc/item/4hs5s9wk.pdf;origin=repeccitec (application/pdf)

Related works:
Working Paper: Navigating the Patent Thicket: Cross Licenses, Patent Pools and Standard Setting (2004)
Working Paper: Navigating the Patent Thicket: Cross Licenses, Patent Pools, and Standard-Setting (2003)
Chapter: Navigating the Patent Thicket: Cross Licenses, Patent Pools, and Standard Setting (2001)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cdl:compol:qt4hs5s9wk

Access Statistics for this paper

More papers in Competition Policy Center, Working Paper Series from Competition Policy Center, Institute for Business and Economic Research, UC Berkeley Contact information at EDIRC.
Bibliographic data for series maintained by Lisa Schiff ().